A constitutional monarchy is a form of government in which a monarch acts as head of state within the parameters of a written (i.e., codified), unwritten (i.e., uncodified) or blended constitution. It differs from absolute monarchy in that an absolute monarch serves as the sole source of political power in the state and is not legally bound by any constitution.

Most constitutional monarchies employ a parliamentary system in which the Monarch may have strictly Ceremonial duties or may have Reserve Powers, depending on the constitution, have a directly or indirectly elected prime minister who is the head of government and exercises effective political power. In the past, constitutional monarchs have co-existed with fascist and quasi-fascist constitutions (Fascist Italy, Francoist Spain) and with military dictatorships.

More frequently however, monarchical institutions have played crucial roles in thwarting coups d'état and the overthrow of democratic institutions by fascist or communist movements. Examples include the attempted 23-F coup in Spain in 1981, the 1981 and 1985 coup attempts in Thailand, and the attempted communist takeover in Grenada in 1983. In the Spanish and Thai cases action taken by the king proved decisive; in the case of Grenada the call for outside assistance was made by the Governor-General (Sir Paul Scoon).

There also exist today several federal constitutional monarchies. In these countries, each subdivision has a distinct government and head of government, but all subdivisions share a monarch who is head of state of the federation as a united whole. The latest country that was completely transformed from an absolute monarchy to a constitutional democratic monarchy is Bhutan.